I'm worried about an American AAdvantage devaluation: Here's what I'm doing about it

Back in June, TPG's Zach Griff spoke to American Airlines' loyalty chief, Rick Elieson, about the fate of AAdvantage award charts. And although at the time, Elieson said American loyalists shouldn't be afraid of an upcoming devaluation, it's clear that American Airlines AAdvantage awards are moving further toward dynamic pricing.

Elieson told Griff, "if fares continue to be lower than historical norms, then so will awards."

But, ever since that interview, I've been nervous about what will happen to the value of American Airlines miles. And my fears are personal. Despite redeeming almost two million AAdvantage miles since 2016, my husband and I are still sitting on over two million American AAdvantage miles.

Today I'll discuss why I'm worried about a potential devaluation and what we're doing to hedge against this potential threat.

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Why I'm worried

AAdvantage initially moved toward dynamic pricing when it rolled out Web Special awards in 2018.

Web Special awards cost less than the standard award chart option but don't allow changes. In particular, when there's MileSAAver award space, you may see Web Special awards that cost less than the award chart for MileSAAver. And if there's only AAnytime space, you may be able to book a Web Special for more than a MileSAAver award but less than an AAnytime award.

AAdvantage currently uses award charts for MileSAAver and AAnytime awards.

But, if AAdvantage removes its award charts, as United and Delta have done, we could see award rates skyrocket past the current AAnytime rates during peak travel times. And if we see award rates become more closely tied to cash fares, it may become increasingly challenging to get outsized value from your miles.

AAdvantage will continue to provide "goalposts and some expectations" regarding award pricing, according to Griff's interview with Elieson.

However, Griff notes that "Elieson compared the next iteration of AA's award charts to a real estate website that shows you how many people have bought a property in a given area and for what price range, as well as a ticker for how many people are looking at a specific property right now."

Depending on how AAdvantage implements upcoming changes, there could be room for savvy travelers to find good deals. But, especially if AAdvantage's calendar search tool isn't improved, I expect the changes will result in AAdvantage loyalists getting less value from their miles on the whole.

What really concerns me is the potential that AAdvantage may devalue -- or even remove -- its partner award charts (either for all partners or its joint venture partners). After all, frequent TPG readers know that my favorite AAdvantage sweet spot is to fly Qatar Qsuites from the U.S. to South Africa for 75,000 miles and $16. Plus, there are several other products operated by partner airlines that I'm hoping to redeem American Airlines miles to fly at more or less current rates.

Since we have over two million AAdvantage miles and we'll both hold at least Platinum Pro elite status through Jan. 31, 2023, my husband and I are tied to the AAdvantage program for the short to medium term. I'm hopeful that when AAdvantage changes (or removes) its award charts, the change is only for American-operated awards. Even so, I'm guarding against devaluation now in case American significantly devalues partner awards too.

Related: Maximizing redemptions with American Airlines AAdvantage

What I'm booking now

In a recent article about how TPG staffers would spend one million American Airlines AAdvantage miles, I mentioned how my husband and I had just over one million American Airlines miles tied to outstanding awards. In particular, we've used American Airlines miles to book upcoming various domestic awards as well as:

• 313,000 miles plus $133.82: Round-trip business class for two from the U.S. to India on American's new route from Seattle to Bangalore.
• 150,000 miles plus $119.10: One-way business class for two from Johannesburg to the U.S. via Doha in Qatar Qsuites.
• 144,000 miles plus $22.40: One-way Flagship First for two from Los Angeles to London via Miami.
• 144,000 miles plus $11.20: One-way Flagship First for two from New York to London via Los Angeles.
• 140,000 miles plus $96.35: Round-trip business class for one from the U.S. to Male, Maldives, via Doha in Qatar Qsuites.
• 40,000 miles plus $103.15: Round-trip economy class for one from the U.S. to Buenos Aires, Argentina.

But, we looked at our accounts and found we still had a lot of American Airlines miles unassigned. So, similar to how I booked a lot of IHG Rewards award stays earlier this year to guard against a potential devaluation, my initial instinct was to book as many American Airlines awards as possible.

We did book several more awards within the last few days.

For example, we booked Japan Airlines business class from Hanada to Dallas for 60,000 miles plus $55.05 each. And we booked a trip from Europe to Kathmandu and then back to the U.S. in Qatar Airlines business class for 112,500 miles plus $112.15 each. We also booked Cathay Pacific business class from San Francisco to Bali via Hong Kong for 70,000 miles plus $33.30 each. Finally, we booked some new domestic awards since I expect American Airlines-operated awards are the most at risk of devaluation.

Unlike hotels where availability often isn't an issue, it takes a lot of time and effort to find availability and dates that work for each flight award you want to book. We can continue to rebook awards and cash fares to destinations that still aren't accepting vaccinated tourists without a quarantine, but our calendar for the next year is filling up.

Although we've snagged some awards and set up ExpertFlyer alerts (ExpertFlyer is owned by TPG's parent company, Red Ventures) for some other awards we'd like to book, we still have a significant chunk of American Airlines miles in our accounts that we haven't yet redeemed.

Related: How to redeem miles with the American Airlines AAdvantage program

Bottom line

Whether this month or next year, devaluations are coming to travel loyalty programs. In fact, they've already started.

Points and miles are a bad long-term investment, as they almost always lose value over time as high-value redemptions are removed or devalued. In turn, Elieson's comments to Griff, along with the reality that airlines often play "follow the leader" makes me think that an American Airlines AAdvantage devaluation is coming sooner rather than later.

While my hunch could be wrong, if you have American Airlines miles, it's worth looking through your upcoming travel plans to see if you should book any new American Airlines awards. If you've had your eye on a specific AAdvantage sweet spot, now is a great time to search for availability and book if you find something that works for you.

After all, if you later decide not to travel, you can cancel your award, redeposit your miles and get the taxes and fees refunded to your credit card without any fees. You're effectively trading the time it takes to find availability and book for the opportunity to lock in a high-value redemption that may not stick around forever.